NVR - Beazer Homes gets Buy rating at Janney as it shifts to a growth story

Janney analyst Tyler Batory initiates coverage of Beazer Homes USA (NYSE:BZH) with a Buy rating for the homebuilder as substantial changes to its balance sheet gives the homebuilder more flexibility to expand its land ownership. Still, Beazer stock drops 1.8%, as home construction stocks in general decline. iShares U.S. Home Construction ETF (BATS:ITB) slips 1.0%. The company "has transitioned from a turnaround/deleveraging story to one driven by growth and execution," Batory said in a note to clients. Batory forecasts gross margin of 22.1% in full-year 2021, up 40 basis points Y/Y; margin growth should be sustainable into FY2022 given a robust average sales price and the recent correction in lumber prices. Sets a $23/share price target, implying 33% upside from Wednesday's close. Price target is derived from 1.1x the FY2022 book value per share estimate and 6.6x the FY2022 earnings per share forecast. The Buy rating diverges from the Neutral Quant rating

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Beazer Homes gets Buy rating at Janney as it shifts to a growth story